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Forbes
10 hours ago
- Business
- Forbes
Regulated But Not Restricted: Software Transformation Despite Compliance Barriers
In highly regulated industries, innovation is stuck in the past, running on 1990s-era technology wrapped in a 2020s coat of paint. In 2011, Marc Andreessen declared that software is eating the world. By 2023, Shyam Sankar observed that software had already eaten the world. But now, the question is: Is the world eating software? Software has become ubiquitous, as cloud, mobile, data, artificial intelligence (AI), and the Internet of Things (IoT) have fused into everyday life. But while software transformation is advancing at a breakneck pace when it comes to the mundane, it's stalling out in highly regulated industries like healthcare and finance, those that could benefit from progress the most. The average American interacts with software daily, almost hourly. Fitness trackers have evolved into medical devices, self-driving cars are rewriting mobility, and AI copilots are reshaping how we work. Software is no longer just eating the world—it is being consumed, regulated, and embedded into critical, real-world infrastructure. Yet, in highly regulated industries, innovation remains stuck in the past, running on 1990s-era technology wrapped in a 2020s coat of paint. Compliance constraints have slowed adoption, leaving industries like defense, finance, and healthcare struggling to integrate modern software-driven value into their core operations. Finding a productive way forward requires keeping the intent of regulation alive while making adjustments as needed. Enabling Software Transformation in Regulated Industries When faced with compliance barriers, most organizations take one of two counterproductive approaches: They either give up, assuming regulations make modern software practices impossible, or they try to shoehorn modern practices into legacy compliance frameworks. Instead of settling for 'no,' it can be beneficial to reframe the problem as 'yes, if.' What has to change for the desired outcome to be achieved? When it comes to outdated policies, it's sometimes possible to identify strategic modifications that maintain the intent of compliance while enabling progress. Regulatory frameworks are designed to protect against specific risks—for example, data protection laws safeguard consumer privacy. They're not meant to stifle innovation. If it's possible to make a business case for an exception, it may be possible to make a change. By addressing underlying concerns instead of mindlessly following outdated rules, transformation may be possible. Of course, there are limitations. While regulatory structures can be reframed, they can't be ignored completely. If you're an auto manufacturer, you build your cars to fit existing infrastructure—the roads and highways already available. You don't build a car that's so big and unwieldy, it doesn't fit on the road, and then insist to the government that the roads should be wider. In the same way, regulated industries must focus on being fit for purpose as they innovate, rather than innovating for innovation's sake. Small Changes Can Mean Big Impact Ultimately, the question isn't whether software can transform highly regulated industries—it undoubtedly can. It's whether these industries, given their regulatory constraints, can consume and adapt to software at the speed of relevance. The world demands trustworthy, scalable, and compliant platforms, but are we truly prepared for the next wave of software-driven transformation? Until we find ways for highly regulated industries to innovate more freely, software transformation will stagnate in these areas, meaning untapped potential and missed opportunities for security, efficiency, and potentially life-saving innovations.
Reuters
20 hours ago
- Business
- Reuters
Breakingviews - Netscape IPO casts a shadow from 1995 over AI boom
NEW YORK, July 24 (Reuters Breakingviews) - With a $300 billion valuation, ChatGPT developer OpenAI towers over peak Netscape. The trailblazing web browser, however, looms large from Silicon Valley to Wall Street as the 30th anniversary of its world-shaking initial public offering approaches. Both the similarities and differences with the internet craze have created some worrisome conditions for today's artificial intelligence mania. Netscape IPO delirium was instrumental in reshaping technology and finance. The company went public on August 9, 1995, just 16 months after veteran entrepreneur Jim Clark and computer programming whiz Marc Andreessen started it. With assistance from Morgan Stanley's Frank Quattrone and Mary Meeker, and Bill Hambrecht of Hambrecht & Quist, the co-founders cleared the way for unprofitable, fast-growing ventures to attract investments from big money managers. The frenzy to buy its shares also spawned a dotcom boom that would run for nearly five years. Moreover, Netscape helped rewrite funding handbooks, debunked some of the first-mover gospel, and provides lasting cautionary tales about capital intensity and the threat from entrenched rivals. As AI fever grips the market, these developments are instructive. Consider the technological backdrop as Netscape released its user-friendly Navigator browser three decades ago. Soon after the market debut, Meeker drafted the first of her regular trend-spotting reports, which have become required reading, opens new tab for the industry. 'What is the Internet?' she pondered early in the inaugural 323-page presentation. While TVs and corded telephones could be found in 95% of U.S. households, less than 1% of the world's population had access to the worldwide web, including email. There were about 16 million users. Netscape sold 5 million shares for $28 apiece, nowhere near enough to satisfy insatiable demand for a company considered to be the future of the internet, despite having lost $4 million on $15 million of revenue during the first half of 1995. The stock nearly tripled, before ending the day at about $58 to impute a $2.3 billion market value. Six months later, the boom got an extra boost from the U.S. government. Deregulation of the telecom industry helped fuel a nearly $500 billion spending spree over roughly five years to build network capacity. There are some notable differences between then and now. Just look at OpenAI, whose ChatGPT exploded onto the scene much like Netscape did by making an arcane technology accessible to the masses. The firm led by Sam Altman is now almost a decade old and three years have passed since it shook up the industry, but it remains beyond the reach of most investors. OpenAI recently raised $40 billion privately, the single biggest funding round in Silicon Valley history, at a $300 billion valuation. With so much venture and later-stage money available to entrepreneurs, it's no wonder the number of tech IPOs has plummeted from 370 in 1999 to just 14 last year. Myriad scandals from the dotcom era involving inflated valuations, excess commissions and improperly allocated shares also led to new regulations that chilled some of Wall Street's willingness to underwrite unproven business models. Efforts in 2012 to make it easier for smaller startups to go public failed to jumpstart the market and arguably put investors at greater risk by reducing the amount of required corporate disclosure. New tech stock issuance is so fallow that JPMorgan has started providing, opens new tab clients with research about private ones. 'Some good business models are out there,' Hambrecht, one of the bankers who advised Netscape, told Breakingviews in an interview earlier this month. 'There's still a lot of demand for new investments, and sites like Robinhood are bringing a new dimension with younger, more aggressive investors. There's just a lack of issues, and I just think the financial markets have changed so significantly since Netscape.' Another big reminder of the time remains entrenched in the technological firmament: Microsoft (MSFT.O), opens new tab. The software behemoth squashed Navigator, which had amassed about 90% of the browser market, by bundling its competing Internet Explorer with the Windows 95 operating system. The aggression attracted the attention of U.S. trustbusters, leading to a landmark lawsuit and settlement. Seemingly heeding the ominous precedent, Microsoft boss Satya Nadella carefully partnered with OpenAI in 2019 while providing a $1 billion investment. Since then, however, the relationship has become increasingly strained, leaving open the possibility that history will rhyme. Altman has another good reason to brush up on the browser wars. Netscape could not have mobilized any faster, having developed a product, dominated the market and created investment buzz within 16 months. And yet it was unable to keep up with a deep-pocketed rival. The company swiftly ceded its share of users and succumbed to giving Navigator away free. In late 1998, Netscape agreed to an ill-fated sale to dial-up internet service provider America Online for about $4 billion in stock, worth $10 billion by the time the deal closed months later. One risk for Altman is that ChatGPT winds up similarly clearing a path only for more established rivals to ultimately walk it. 'It's always striking – given all the tech enthusiasm – how few companies become massive winners. There's a lesson there,' Meeker wrote to Breakingviews in an emailed reply to questions. 'There's also a lesson related to just how massive and foundational the big winners can become.' Her observation partly explains the mad rush to build data centers, buy chips and secure the power used to train and expand large language models. The danger is that all this investment alters Big Tech's use of capital for the worse. Alphabet (GOOGL.O), opens new tab, (AMZN.O), opens new tab, Meta Platforms and Microsoft are on track to deploy more than $300 billion this year alone, a 13-fold increase from a decade ago. Although they're funding the outlays with their own cash flow, unlike the debt-heavy telecom providers of the 1990s, there is a risk that capacity winds up similarly outpacing demand. As if all that isn't enough to give investors pause, there are other indications of recklessness, any one of which could cause fear to ripple through the market. Cryptocurrency exuberance abounds thanks to relaxed restrictions; shell companies stuffed with cash have made a comeback buying speculative ventures; meme stocks keep raging; and U.S. regulators have proposed rolling back rules designed to curb day trading and protect investors from big losses that were put into place in 2001 after the dotcom bust. The dearth of IPOs is also leading to a proliferation of sites offering unproven access to hot, private tech firms. It's all part of a shaky edifice that portends another bittersweet anniversary. Full view will be published shortly. Follow Jeffrey Goldfarb on X, opens new tab and Linkedin, opens new tab.
South China Morning Post
17-07-2025
- Business
- South China Morning Post
Meta's Zuckerberg settles Facebook lawsuit over Cambridge Analytica scandal
Advertisement A trial over the long-running case had just begun on Wednesday, with defendants accused of overpaying the US government in 2019 when they engineered a US$5 billion settlement for alleged privacy violations in the scandal. Sources familiar with the matter confirmed the settlement without providing details. The settlement comes the same day that Marc Andreessen, one of Silicon Valley's most influential venture capitalists and a board member of the company now known as Meta, was to take the stand. Zuckerberg himself was expected in the Wilmington, Delaware courtroom on Monday. Advertisement Silicon Valley investor Peter Thiel and former Meta top executive Sheryl Sandberg were also expected to face questioning in the court.
Yahoo
17-07-2025
- Business
- Yahoo
Investor Andreessen to take stand to defend his role in Facebook privacy case
By Tom Hals WILMINGTON, Delaware (Reuters) -Famed investor Marc Andreessen is scheduled to take the stand on Thursday to defend his role on the Facebook board of directors when it was hit with a $5 billion fine in 2019 for alleged violations of an agreement with a U.S. regulator to protect user privacy. Shareholders of Meta Platforms hope to hold the co-founder of the Andreessen Horowitz venture capital firm, along with Meta's CEO Mark Zuckerberg and others, liable for more than $8 billion in fines and legal costs the company paid in recent years to resolve claims that it had violated a 2012 agreement with the U.S. Federal Trade Commission. The FTC fined Facebook $5 billion in 2019 for failing to comply with that agreement, which is central to the case. Zuckerberg is expected to take the stand on Monday. The shareholders want the 11 defendants to use their personal wealth to reimburse the company. The defendants have denied the allegations, which they have called "extreme claims." Facebook changed its name to Meta in 2021. The company is not a defendant and declined to comment. The non-jury trial before Chancellor Kathaleen McCormick that began on Wednesday is scheduled to run through the end of next week in Delaware's Court of Chancery. A ruling in the case, which will mostly focus on decade-old events and board meetings, will likely take months after the trial. Andreessen's appearance comes after his firm last week said it was changing its state of incorporation to Nevada from Delaware, where the majority of U.S. publicly traded companies are based. His firm cited the lack of certainty in Delaware courts, pointing to two rulings, including one by McCormick last year to rescind Elon Musk's $56 billion pay package from Tesla. Most publicly traded U.S. companies are incorporated in Delaware, whose state budget relies on fees from chartering businesses. After his pay package was rescinded, Musk led his companies to incorporate in Texas from Delaware and encouraged others to follow, though only a handful have done so. Delaware's lawmakers this year overhauled the state's corporate law in a bid to prevent companies from leaving. Joel Fleming, an attorney who represents Meta shareholders, questioned if Andreessen's firm was trying to pressure the court, which he said would fail. "It's a ham-fisted attempt to do what Elon Musk did -- to huff and puff and send a message to the Court of Chancery," said Fleming. A spokesperson for the Andreessen Horowitz firm did not immediately respond to a request for comment. The case will also feature testimony from former Facebook board members Peter Thiel, Palantir Technologies co-founder, and Reed Hastings, co-founder of Netflix. Meta investors allege in the lawsuit that former and current board members completely failed to oversee the company's compliance with the 2012 FTC agreement and claim that Zuckerberg and former Chief Operating Officer Sheryl Sandberg knowingly ran Facebook as an illegal data harvesting operation. The case followed revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump's successful U.S. presidential campaign in 2016. Those revelations led to the FTC fine, which was a record at the time. On Wednesday, an expert witness for the plaintiffs testified about what he called "gaps and weaknesses" in Facebook's privacy policies but would not say if the company violated the 2012 agreement that Facebook reached with the FTC. Jeffrey Zients, a former board member, testified on Wednesday that the company did not agree to the FTC fine to spare Zuckerberg legal liability, as shareholders allege. On its website, the company has said it has invested billions of dollars into protecting user privacy since 2019. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
17-07-2025
- Business
- The Star
Investor Andreessen to take stand to defend his role in Facebook privacy case
FILE PHOTO: Marc Andreessen, of a16z, speaks during 2016 TechCrunch Disrupt in San Francisco, California, U.S. September 13, 2016. REUTERS/Beck Diefenbach/File Photo WILMINGTON, Delaware (Reuters) -Famed investor Marc Andreessen is scheduled to take the stand on Thursday to defend his role on the Facebook board of directors when it was hit with a $5 billion fine in 2019 for alleged violations of an agreement with a U.S. regulator to protect user privacy. Shareholders of Meta Platforms hope to hold the co-founder of the Andreessen Horowitz venture capital firm, along with Meta's CEO Mark Zuckerberg and others, liable for more than $8 billion in fines and legal costs the company paid in recent years to resolve claims that it had violated a 2012 agreement with the U.S. Federal Trade Commission. The FTC fined Facebook $5 billion in 2019 for failing to comply with that agreement, which is central to the case. Zuckerberg is expected to take the stand on Monday. The shareholders want the 11 defendants to use their personal wealth to reimburse the company. The defendants have denied the allegations, which they have called "extreme claims." Facebook changed its name to Meta in 2021. The company is not a defendant and declined to comment. The non-jury trial before Chancellor Kathaleen McCormick that began on Wednesday is scheduled to run through the end of next week in Delaware's Court of Chancery. A ruling in the case, which will mostly focus on decade-old events and board meetings, will likely take months after the trial. Andreessen's appearance comes after his firm last week said it was changing its state of incorporation to Nevada from Delaware, where the majority of U.S. publicly traded companies are based. His firm cited the lack of certainty in Delaware courts, pointing to two rulings, including one by McCormick last year to rescind Elon Musk's $56 billion pay package from Tesla. Most publicly traded U.S. companies are incorporated in Delaware, whose state budget relies on fees from chartering businesses. After his pay package was rescinded, Musk led his companies to incorporate in Texas from Delaware and encouraged others to follow, though only a handful have done so. Delaware's lawmakers this year overhauled the state's corporate law in a bid to prevent companies from leaving. Joel Fleming, an attorney who represents Meta shareholders, questioned if Andreessen's firm was trying to pressure the court, which he said would fail. "It's a ham-fisted attempt to do what Elon Musk did -- to huff and puff and send a message to the Court of Chancery," said Fleming. A spokesperson for the Andreessen Horowitz firm did not immediately respond to a request for comment. The case will also feature testimony from former Facebook board members Peter Thiel, Palantir Technologies co-founder, and Reed Hastings, co-founder of Netflix. Meta investors allege in the lawsuit that former and current board members completely failed to oversee the company's compliance with the 2012 FTC agreement and claim that Zuckerberg and former Chief Operating Officer Sheryl Sandberg knowingly ran Facebook as an illegal data harvesting operation. The case followed revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump's successful U.S. presidential campaign in 2016. Those revelations led to the FTC fine, which was a record at the time. On Wednesday, an expert witness for the plaintiffs testified about what he called "gaps and weaknesses" in Facebook's privacy policies but would not say if the company violated the 2012 agreement that Facebook reached with the FTC. Jeffrey Zients, a former board member, testified on Wednesday that the company did not agree to the FTC fine to spare Zuckerberg legal liability, as shareholders allege. On its website, the company has said it has invested billions of dollars into protecting user privacy since 2019. (Reporting by Tom Hals in Wilmington, Delaware;Editing by Noeleen Walder and David Gregorio)
